Compound growth

How it works

The annual return is converted to its monthly equivalent and applied every month, with the monthly addition made at the end of each month. The solid line is the value at the end of each year; the dashed line and the shaded area are what was paid in, so the gap between them is growth on growth. Doubling time is how long the starting sum alone takes to double at that return.

Assumptions

A constant return every year, which no real investment delivers; no fees, taxes or inflation. Figures are in whatever currency you think in. An illustration of compounding, not a forecast.

For information and education only. Not investment advice.